Kohl's bids for 4 stores in New York

0 Comments | Milwaukee Sentinel, Jan 16, 1995 | by LARRY ENGEL

Kohl's Corp. reportedly wants to buy four empty department stores in shopping malls in the Rochester, N.Y., area.

The Menomonee Falls-based retailer has offered to pay $18 million for the stores, which had been operated by McCurdy & Co., according to a Rochester newspaper.

The disposition of the McCurdy stores is being contested in an antitrust suit arising from McCurdy's sale last June of the stores and four others to May Department Stores Co. for $17.8 million.

The Rochester Democrat and Chronicle reported that Kohl's, in a Dec. 30 letter to the court from Patrick Peery, vice president and director of real estate, asked that its offer be considered in the settlement of the case.

The letter said Kohl's had been "reassured" by the defendants in the case that no settlement would occur without Kohl's first being given the chance to buy the four stores.

R. Donald Oscarson, Kohl's senior vice president for marketing, declined to comment on the reports.

"We don't comment on anything concerning situations that are involved with the courts," he said.

"It wouldn't surprise me at all to see them (Kohl's) looking at the western part of New York for expansion," said Kurt Rivard, an analyst at Robert W. Baird & Co. Inc.

"I think the demographics of the Rochester area would be similar to those of the Midwest markets they compete in. If they were going to open a grouping of four stores, that would be fairly positive."

Bon-Ton Stores, a York, Pa.- based chain of department stores, also has offered to buy the four stores. The Kohl's offer of $18 million is higher than Bon-Ton's latest publicly disclosed bid of $16.3 million.

Bon-Ton and the New York state attorney general brought the antitrust suit against McCurdy, May and Wilmorite Inc., a shopping mall developer. May owns Kaufmann's Department Stores, which operates stores in the Rochester area.

U.S. District Judge David G. Larimer ruled the sale violated antitrust laws.

The Rochester newspaper reported that McCurdy told the court that returning May's $17.8 million would threaten McCurdy's financial existence and imperil further development of retail business in downtown Rochester.

Bon-Ton has argued that Kohl's has no legal right to intervene at this late stage in the case.

Kohl's has been expanding aggressively.

The company now has 108 department stores, including 18 that were opened in 1994. The company plans to open about 20 stores in 1995, including a store in Erie, Pa., the company's first store in Pennsylvania.

The Erie store is to be opened in late summer. Erie is about 150 miles southwest of Rochester.

Kohl's reported this month that its December sales were up 24.6%, and comparable store sales were up 7.6% from a year ago. The increases were on top of a strong showing in December 1993, when sales increased 20.6% and comparable store sales increased 9.7% from a year earlier.

Rivard has estimated that Kohl's will have sales of $550 million and earnings of 93 cents per share in the fiscal fourth quarter ending Jan. 28, 1995. That would be up from sales of $457 million and earnings of 77 cents per share a year earlier.

Friday's closing price of Kohl's stock was $41.50 per share, up 37 1/2 cents, on volume of 61,400 shares.